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Serbian election kicks off tumultuous year for Balkan politics

Serbian president Tomislav Nikolić met with European Council president Donald Tusk in December as part of ongoing EU accession negotiations. (Facebook / Aydemir Dursun)
Serbian president Tomislav Nikolić met with European Council president Donald Tusk in December as part of ongoing EU accession negotiations. (Facebook / Aydemir Dursun)

This weekend, Serbia’s prime minister Aleksandar Vučić finalized a four-year consolidation of power in early parliamentary elections that delivered a landslide victory for his center-right Serbian Progressive Party (SNS, Српска напредна странка), giving him the mandate and the support to advance political and economic reforms that he hopes could one day result in Serbia’s accession as a member-state of the European Union.Serbia_Flag_Icon

In results late Sunday night, the SNS a wide lead over its nearest competitor, the center-left Socialist Party of Serbia (SPS, Социјалистичка партија Србије), which currently serves as the government’s junior coalition partner. The Socialist leader, Ivica Dačić, a former prime minister, currently serves as Vučić’s foreign minister. Several parties of the fragmented center-left and hard-right ultra-nationalist parties trail far behind in single digits. With just under 50% of the total vote on Sunday, the SNS can expect to have an absolute majority in Serbia’s unicameral, 250-seat National Assembly (Народна скупштина).

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Vučic called the snap elections earlier this year, fully knowing how well his party was doing in the polls. Like it or not, Vučic and the former SNS leader Tomislav Nikolić, currently in his first term as president, will be directing Serbian policy through the end of the decade.

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RELATEDVučić set to consolidate political power in Serbia
with 3rd consecutive win

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But Serbia is far from the only country in the Balkans that will vote this year, and Sunday’s vote kicks off what could become a season of electoral change across the region.

Unlike Serbia, where voters were happy to deliver Vučic the broad mandate he wanted, voters in the rest of the western Balkans are far less sanguine about their elected officials. Opposition politicians in Montenegro nearly ousted their long-serving prime minister earlier this year, though fresh elections are due before October. The twists and turns of a wiretapping scandal in Macedonia have reached fever pitch this week, with protesters marching against the government in Skopje, and a June 5 parliamentary election date is currently in doubt.

A region that still dreams of EU accession

(Radio Free Europe / Radio Liberty)
(Radio Free Europe / Radio Liberty)

The western Balkans are the last major region of Europe that has not yet been integrated into the European Union. With the possible exception of Turkey, it’s the final frontier of EU accession. Among the six (or seven, if you count Kosovo) countries that emerged out of the former Yugoslavia, only two of them have won EU member-state status, Slovenia and Croatia. They join only Albania in representing the western Balkans in the North Atlantic Treaty Organization.

The remaining Balkan states are in varying stages of their quests for accession:

  • Macedonia was granted candidate status back in 2005, but democratic and economic backsliding have stalled its membership push, not to mention its long-running spat with Greece over the name, ‘Macedonia,’ which Greeks consider to be an inaccurate appropriation of Greek culture and history.
  • Montenegro gained candidate status in December 2010, and negotiations are ongoing, though Montenegro has fully implemented just two of 33 chapters of the acquis communautaire, the body of EU law required for all member-states.
  • The European Union granted Serbia candidate status in March 2012, negotiations kicked off in 2014 and Vučic is eager to conclude accession by the year 2020, though that remains incredibly optimistic.
  • Albania won candidate status in June 2014, and though its negotiations have yet to begin, prime minister Edi Rama, a former artist who charged to power in 2013, is an energetic center-left figure who’s worked closely with former British prime minister Tony Blair to develop a package of EU-friendly economic and political reforms.
  • Bosnia and Herzegovina applied for membership status in February 2016, but the European Union hasn’t yet granted it candidate status.
Albania's pro-European, pro-reform prime minister Edi Rama met with US president Barack Obama last week. (Facebook)
Albania’s pro-European, pro-reform prime minister Edi Rama met with US president Barack Obama last week. (Facebook)

Given the existential threats that the European Union faces, hardly anyone outside the Balkans seems to have the stomach for what promises to be a difficult round of accession. The June 23 referendum in the United Kingdom on whether to leave the European Union remains too close to call, but its passage would be a major blow to the notion of ‘ever closer union.’ Much of southern Europe, most especially Greece, have still not recovered from the eurozone crisis that stretched the limits of EU financial, economic and monetary policy and that brought into question the future of the single currency. Meanwhile, the most acute refugee crisis in Europe since World War II has weakened the Schengen agreement by undermining the free movement of people within the European Union and the eradication of internal EU borders.

For current EU members, then, it may look like there’s precious little benefit in EU accession. But for the Balkan states, there remains enthusiasm that EU membership will force the kind of reforms that could reduce the crippling corruption that is, on general, worse in the Balkans than in the rest of Europe:balkans CPI 2015

Balkans populations also hope that EU membership will also clear the path not only for reforms, but for the kind of funding that could allow them to catch up to the higher EU standard of living, which, not surprisingly lags far behind: 
Balkans GDPWith eventual EU membership — and the promise it brings of greater incomes and opportunities — dangling as a carrot, it’s no surprise that Vučic has amassed so much political power in Serbia and an impressive amount of respect among European leaders. But it’s that same dynamic that could lead to massive changes throughout the rest of the region, most notably in Montenegro and Macedonia.

Wiretaps and pardons

Macedonian prime minister Nikola Gruevski is facing protests on the streets of Skopje after the dismissal of an inquiry into a wiretapping scandal. (Facebook)
Former Macedonian prime minister Nikola Gruevski’s government is facing protests on the streets of Skopje after the dismissal of an inquiry into a wiretapping scandal. (Facebook)

Eleven days ago, Macedonia’s president Gjorge Ivanov pardoned 56 people, all of whom were implicated in a wide-ranging wiretapping scandal that forced the country’s powerful prime minister, Nikola Gruevski, to resign in January. Beginning in the early 2010s, Gruevski and his government were found to have wiretapped illegally up to 20,000 Macedonians, opposition figures, journalists and even diplomats.  macedonia

Ivanov, who announced a decree that would end all investigations into the wiretapping scandal, set off a constitutional crisis from what had already been a crisis of governance and the rule of law, and his announcements met with sharp disapproval from EU officials and Macedonia’s political opposition.

Gruevski’s ruling VMRO-DPMNE (Внатрешна македонска револуционерна организација – Демократска партија за македонско национално единство; Internal Macedonian Revolutionary Organization – Democratic Party for Macedonian National Unity) has been in power since 2006. It easily won a fourth consecutive term in April 2014, though the election was hardly a fair fight.

Gruevski has spent much of the past decade stoking nationalist sentiment, which has antagonized Greece; for example, he erected an 11-foot high statue of Alexander the Great in Macedonia’s capital of Skopje. While the spat with Greece helped Gruevski, in part, to rally domestic support, it has only hardened Greek determination to block Macedonian membership not only in the European Union, but NATO as well. Meanwhile, the VMRO-DPMNE’s government has done little to introduce reforms to stem corruption or promote liberalization.

Macedonia opposition leader Zoran Zaev stands an excellent chance of winning power in elections that may still be held on June 5. (Facebook)
Macedonia opposition leader Zoran Zaev stands an excellent chance of winning power in elections that may still be held on June 5, if he doesn’t boycott them. (Facebook)

Macedonians now seem fed up with Gruevski’s empty promises and hollow rhetoric, to say nothing of the wiretapping shenanigans and his attempts to persuade Ivanov to pull the plug on the ongoing investigations.

Elections were set for June 5, but the government, fearing a rout, may try to postpone them. A meeting scheduled earlier today in Vienna among EU leaders and Macedonia’s political leaders was cancelled, even as the intensity of Macedonia’s protesters increases.

Zoran Zaev, Macedonia’s opposition leader and the head of the center-left Social Democratic Union of Macedonia (SDSM, Социјалдемократски сојуз на Македонија), was instrumental in revealing the extent of the wiretapping scandal, though only after Gruevski tried to have Zaev jailed for allegedly attempting to illegally toppling the government.

For years, Zaev has opposed Gruevski’s nationalist showmanship and denounced the government’s flashy development projects as wasteful vanity spending. Now, with Ivanov’s announcement to suspend the wiretapping scandal that Zaev himself helped to reveal, the opposition leader has joined the front lines of the protesters. There’s a sense that he could soon be leading the country, though he pledged earlier this month to boycott elections without additional reforms to guarantee political freedom and a free and fair electoral process. An original plan to hold elections in April has already been postponed once to June and could well be delayed again.

Negotiations over the conduct and timing of the Macedonian elections are just the beginning of what could become an even more tumultuous year. If Zaev and an opposition coalition forces VMRO-DPMNE from power, no one knows exactly how willingly Gruevski and his allies will concede. Moreover, from day one, a Zaev-led government would be locked in a high-stakes battle with Ivanov to reinstate the wiretapping investigation.

Đukanović’s last stand?

Montenegro's prime minister Milo Đukanović has dominated politics for a quarter-century, but his time may soon be running out. (CDM)
Montenegro’s prime minister Milo Đukanović has dominated politics for a quarter-century, but his time may soon be running out. (CDM)

Though it officially won its independence from Serbia only in June 2006, Milo Đukanović has controlled Montenegro like a personal fiefdom since 1991, when he was first elected prime minister. Đukanović has held power, on and off, ever since.montenegro

Polls show that Đukanović and his Democratic Party of Socialists (DPS, Demokratska Partija Socijalista Crne Gore) hold a wide lead in elections that have to be called within the next six months. But that belies the frustration that’s built for a quarter-century with Đukanović and his family, whose opponents argue that they run Montenegro as their own personal duchy of corruption.

As in Serbia, Montenegro’s opposition is even more split today than it was in the last election. The conservative opposition Democratic Front (Demokratski front) did poorly in the 2012 parliamentary elections, and its leader Miodrag Lekić narrowly lost the 2013 presidential election. Last year, however, Lekić left the party to form Democratic Alliance (DEMOS, Demokratski savez), a competing center-right party.

In December, however, Đukanović only narrowly survived a vote of no confidence in Montenegro’s unicameral, 81-member parliament (Skupština Crne Gore), following widespread protests that began in October over longstanding suspicions of Đukanović’s corruption. Protesters demanded his resignation and a transitional government; Đukanović himself spent half of the 2000s fending off a criminal inquiry into corruption from an Italian prosecutor. Đukanović’s long-time allies, the Social Democratic Party (Socijaldemokratska Partija Crne Gore), left government for the first time since 1998.

Đukanović has hoped that Montenegro’s relatively strong economy and a general trend toward liberalization will distract from his critics’ worst allegations. Moreover, Montenegrins will go to the polls as he pursues the country’s accession to NATO after formally opening talks in February. It’s a step that has appalled Moscow, which still holds plenty of economic and cultural power in the western Balkans, despite the region’s aspirations to integrate further with the rest of Europe.

Đukanović, who is only 54 years old, seems unlikely to take the opportunity of 2016 elections to step down. But it’s not inconceivable that, despite Montenegro’s more successful strides toward NATO and, eventually, EU accession, he too will face the kind of popular wrath that is now greeting Gruevski across Macedonia.

Bulgaria election results: Borissov returns to power after 1.5-year break

borissov

Pity poor Bulgaria. It has the lowest GDP per capita of the entire European Union (around $7,300). It has lost over 19% of its population from its 1988 peak. It is now struggling through the latest European financial crisis with a series of revolving governments, low economic growth and an unemployment rate that today is still over 11%.bulgaria flag

So when Bulgarians voted on Sunday to elect yet another government, they did do so with the same kind of ennui that’s marked so many of the country’s recent, frequent elections and a sense of hopelessness as the country’s youngest, brightest minds look to Germany, London and elsewhere for work.

Boyko Borissov (pictured above), a former center-right prime minister between 2009 and May 2013, is set to return to the office he once held, following a technocratic, center-left government headed by former finance minister Plamen Oresharski that fell in August. Bulgaria has since been governed by another caretaker, Georgi Bliznashki, who warned that Bulgaria’s next government needs to be strong enough to carry through major reforms to pull the country out of its ‘post-communist swamp.’

Borissov is the leader of the Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България), and his main opponent is the Coalition for Bulgaria (Коалиция за България), which is essentially a wider version of the center-left. Bulgarian Socialist Party (BSP, Българска социалистическа партия).

The Bulgarian Socialists won enough seats in the last election in May  to form a governing coalition with the  Movement for Rights and Freedoms (DPS, Движение за права и свободи), a liberal party that represents ethnic Turks and other Muslims.

Among the mounting problems that the government faced was the collapse of Bulgaria’s fourth-largest bank earlier this summer, Corporate Commercial Bank, which froze the accounts of 200,000 Bulgarians. Protests against the government last year failed to result in any substantive change.

This time around, however, they fell far lower, as GERB seemed headed to a clear victory. With just over 42% of the vote counted early Monday morning, GERB led by a margin of over two-to-one:

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Bulgarians voted Sunday to elect all 240 members of the unicameral National Assembly (Народно събрание), and early results indicated that four new groups would enter the parliament, doubling  the number of parties from four to eight.

In fourth place, however, is a potential coalition partner for GERB, the Reformist Bloc (Реформаторски блок), formed in December 2013 as a liberal electoral bloc that, like GERB, lies on the center-right, that won attention in May’s European parliamentary elections when it won one of Bulgaria’s seats. Together, GERB and the Reformist bloc will hold nearly 45% of the seats in the National Assembly, depending on whether another small group, the Alternative for Bulgarian Development, remains above the 4% threshold needed for winning seats.

That means that Bulgaria’s next government is unlikely to be strong enough to effect the kind of massive reforms that could transform policy on a scale sufficient to stop the country’s economic, cultural and demographic hemorrhaging.  Continue reading Bulgaria election results: Borissov returns to power after 1.5-year break

Who is Plamen Oresharski?

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The good news is that after months of uncertainty, Bulgaria has a new government.bulgaria flag

The bad news is that, in taking office, the new Bulgarian prime minister Plamen Oresharski warned his country that he wouldn’t make them rich and prosperous, but that he would work to ensure that over the course of his potentially four-year term in power, he would work to bring more hope and confidence that Bulgaria is ‘on the right track.’

Talk about lowering expectations.

After losing power in July 2009 just months after the global financial crisis, prime minister Sergei Stanishev and the center-left Bulgarian Socialist Party (BSP, Българска социалистическа партия) and its allies triumphed in the parliamentary elections earlier this month over his successor, Boyko Borissov and the center-right Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България).

So within two election cycles, Bulgarians have swung from the left to the right and, having indicated their dissatisfaction with both, are turning to a modified center-left government, with Oresharski, a former finance minister leading a semi-technocratic government supported by the Bulgarian Socialists and the third-largest party in Bulgaria’s parliament, the Movement for Rights and Freedoms (DPS, Движение за права и свободи), a liberal party that represents ethnic Turks and other Muslims.

Oresharski served as finance minister in Stanishev’s previous government from 2005 to 2009 in a career that’s spanned working in Bulgaria’s finance ministry since the early 1990s.  As finance minister, he worked to lower the Bulgarian corporate tax rate to 10% in 2007 and then followed up with a flat-tax rate of 10% on all personal income in 2008.

As prime minister, Oresharski has appointed Petar Chobanov as his own finance minister.  Chobanov himself is not technically a member of the Bulgarian Socialists, though he led the finance ministry’s forecasting agency under Oresharski in the previous government.  Chobanov, like Oresharski, leans toward a conservative fiscal policy in a country that, unlike much of Europe, has a strong budgetary outlook — its public debt load is just around 18% of GDP.  Nonetheless, Bulgaria hasn’t escaped the stagnant economic conditions that have plagued the rest of Europe, with GDP growth of less than 2%, an unemployment rate of 12.6% as of spring 2013, and an aging, declining population that’s shrunk by nearly 1.5 million since the 1980s.  Bulgaria and its neighbor Romania remain the two poorest countries in the European Union.  Continue reading Who is Plamen Oresharski?

Bulgarian ennui leads to gridlocked result between Socialists, GERB

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After Iceland’s election last month, I pointed to a trend in European politics that I called the European three-step, which goes something like this:bulgaria flag

  1. Left-wing government presides over initial economic collapse in 2008-09 in aftermath of global financial crisis
  2. Right-wing government defeats leftists in election, only to preside over more painful economic effects of eurozone crisis, continued European recession and painful budget cuts and tax increases.
  3. Left-wing government returns back to power in second election despite unenthusiastic electorate that has begun looking for more radical alternatives.

That pattern doesn’t exactly fit what happened in Bulgaria’s election over the weekend, but it comes fairly close:

bulgaria resultsSo after blazing into office after the July 2009 elections with a landslide victory, prime minister Boyko Borissov and his center-right Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България) clawed their way to a narrow plurality of the vote over former Sergei Stanishev and the center-left Bulgarian Socialist Party (BSP, Българска социалистическа партия), which governed from 2005 to 2009.

Bulgaria’s electorate turned out in lower numbers than at any time since Bulgaria emerged from the Iron Curtain in 1989.

Maybe that’s fitting, because Bulgaria’s electorate is also smaller than at any time since the 1980s — its 7.5 million population has dropped by about 1.5 million people in the past quarter century.  Bulgaria’s actually in decent fiscal shape for the time being — its public debt is low (only about 18% of GDP) and its budget deficit is below 2% of GDP.  But in just about every other way, Bulgaria is in deep trouble.

As a perennial contender with Romania as the poorest nation in the European Union, Bulgaria’s shrinking population, rising unemployment, flatline GDP growth (the economy just barely grew in 2012) and rising energy costs have left Bulgarians suffering some of the worst effects of Europe’s ongoing recession.  A wiretapping and eavesdropping scandal had already plagued Borissov’s government throughout the campaign before the discovery of 350,000 fake ballots in the lead-up to the election that have also left Bulgarians with little confidence in either major party to address what amounts to an existential challenge for Bulgaria.

GERB won 30.53% of the vote to just 26.65% for the Bulgarian Socialists, which translates into 12 greater seats for GERB than the Bulgarian Socialists (98 to 86), but it’s a far cry from the 22% gap between the two parties that had left GERB with a nearly three-to-one advantage (117 to 40) in Bulgaria’s 240-seat, unicameral National Assembly (Народно събрание).

Although GERB will technically be the largest bloc in the National Assembly, Stanishev (pictured above) seems likely to return as prime minister in a coalition with the third-largest party, the Movement for Rights and Freedoms (DPS: Движение за права и свободи), an economically liberal party that represents ethnic Turks and other Muslims and that has indicated it would support the Bulgarian Socialists.  Together, however, the two parties would have just 119 seats, two short of a majority.

That’s because GERB is unlikely to be able to govern on its own, and it’s loathe to form a coalition with Attack (Политическа партия Атака) is a far-right, anti-European nationalist party.  Despite the horrid economic conditions in Bulgaria, though, support for Attack actually dropped since 2009 from about 9.4% to 7.3%, though it gained two seats for a total of 23 after Sunday’s election.  Together, GERB and Attack would only command a bare one-vote majority, and Borissov would likely prefer new elections than to govern in a weak coalition with a noxious far-right partner like Attack.

GERB and the Bulgarian Socialists have ruled out a ‘grand coalition’ between the two of them, and the DPS has ruled out any kind of coalition with Attack, which makes sense given Attack’s virulent anti-Turk and anti-Roma positions.

But that doesn’t mean that Stanishev can’t find a couple of votes from GERB, perhaps, to push him into office, at least for a short while.  Otherwise, new elections are all but inevitable, though it’s unclear what exactly a new round of elections would mean for Bulgaria’s policy options.

Given that Bulgaria still uses the lev and not the euro, the silver lining is that Bulgaria’s political turmoil won’t spin off yet another cardiac-clenching eurozone crisis moment.  But Europe nonetheless should be quite concerned, especially in light of the erosion of nascent legal and democratic institutions in nearby Hungary and Romania.

Bulgarian electorate unenthusiastic about both major parties as elections loom

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The inestimable Edward Hugh wrote over the weekend that Bulgaria’s major political crisis is really the fact of its depopulation — he identifies the loss of 1.5 million Bulgarians as the primary policy problem facing Bulgaria (and much of Eastern Europe and the economic periphery of Europe) in the coming years, cautioning that we should be pessimistic about rosy GDP growth estimates for Bulgaria of 3% or 4% after 2014:bulgaria flag

It is hard to see how you can get serious retail sales growth in a population that is shrinking so rapidly. The end result is that the economy grew steadily into the global crisis, and subsequently has stagnated. This stagnation isn’t simply conjunctural anymore, it has become structural, as the decline in domestic demand associated with ongoing deleveraging and population ageing and shrinkage precisely offsets the positive impact of all that export growth.

So as we think about the recent resignation of Bulgaria’s government in advance of what were supposed to be summer elections (now more likely to be spring elections — Borissov has been unable to convince opposition parties to support a short-term interim coalition government), it’s important to keep that aspect in mind, especially in light of an electorate that seems incredibly disengaged by either the left or the right in Bulgaria.  His government now returned his mandate to form a new government, and the center-left opposition is expected to follow suit, precipitating what is very likely to be springtime parliamentary elections in Bulgaria, a country of 7.5 million people bordering Turkey, Greece and the Black Sea on Europe’s peripheral southeast.

Boyko Borissov (Бойко Борисов) came to office nearly four years ago following a rout by his center-right Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България), a relatively new iteration of Bulgaria’s major conservative party that won nearly 40% of the vote and took 117 seats in Bulgaria’s 240-seat, unicameral National Assembly (Народно събрание).  Borissov (pictured above) and GERB defeated the center-left Bulgarian Socialist Party (BSP, Българска социалистическа партия), led both then and now by Sergei Stanishev, Borissov’s predecessor as prime minister from 2005 to 2009.

Borissov, a former mayor of Bulgaria’s capital Sofia, was once seen as an earthy and decisive leader that Bulgarians turned to in hopes he would reduce corruption and jumpstart the economy.  Stanishev, for his part, was once praised for his role in bringing Bulgaria into the European Union in 2007.  But like many countries in Europe following the 2008-09 global financial crisis and subsequent eurozone crisis, the country has now suffered through both a center-right and center-left government, each of which has been relatively powerless to reinvigorate growth.  The result is that Bulgarians are disillusioned with both Borissov and Stanishev.

Bulgaria’s unemployment rate stands at 12.4%, and its GDP growth has been tepid for the past five years — 1.7% in 2011, an estimated 0.5% in 2012, and is estimated to grow just 1.4% in 2013.

Unlike in many countries, Bulgaria doesn’t have huge public debt issues — its budget deficit was just 1% of GDP in 2012 — as Hugh notes:

Having said that, the country’s government debt at under 14% of GDP is incredibly low, so there is room for flexibility, if it wasn’t populist flexibility. The real issue is that simply spending more this year, or next, won’t fix the underlying problem, and that problem is unlikely to be addressed until it is recognized as a problem by the institutions responsible for economic policy formulation.

That means, in the short-term, Bulgaria seems insulated from the need to institute incredibly deep austerity measures that could crimp domestic aggregate demand, thereby exacerbating Bulgarian growth, though Borissov’s government has implemented all-too-familiar wage and pension freezes as well as tax increases.

More immediately, the cause of the latest government crisis has been protests over higher fuel costs, prompting popular calls for the nationalization of the electricity industry in Bulgaria, and prompting Borissov to pick nationalist, populist fights with the Czech Republic (tiny Bulgaria can hardly pick a fight with Russia, for example, from which it imports 90% of its natural gas).  With a GDP per capita of around $14,000, it routinely competes with its northern neighbor Romania as the poorest member of the European Union.

Borissov has advocated imposing penalty fees upon ČEZ Group, the Czech company that’s also the largest utility in Central and Eastern Europe, which has already sparked a diplomatic tussle between Prague and Sofia, and which could sound alarm bells for potential investors in Bulgaria:

If pushed through, the fines for ČEZ and two other foreign-owned firms will not encourage other investors in Bulgaria, who already have to navigate complicated bureaucracy and widespread corruption and organised crime to take advantage of Bulgaria’s 10-percent flat tax rate.

Albania, which remains outside of the European Union, last month revoked ČEZ’s permits to distribute energy, and a fair share of Bulgarians would like to follow Albania’s lead.

In a Mediana poll released on February 15, both GERB and the Bulgarian Socialists seem to have slumped: the Bulgarian Socialists lead with an anemic 22.5%, and GERB would win 19.3%, with a significant number of voters undecided.  Both Borissov and Stanishev have approval ratings of just 29%, underlining just how unpopular both options are to rank-and-file Bulgarians.

Hugh’s solution is supranational. Continue reading Bulgarian electorate unenthusiastic about both major parties as elections loom